By Rebecca Burn-Callander Wednesday, 16 January 2013

Facebook's new search will not challenge Google. Honest!

Mark Zuckerberg has revealed that Facebook has created its own search engine, dubbed Graph Search. But this is no Google rival, he says: it can only search Facebook.

The new feature will allow Facebook users to search the content uploaded by their friends to find out everything from their favourite movies to which restaurants they’ve recently recommended. It’s called Graph Search (catchy!) because of Facebook’s penchant for referring to its membership, content and general data as ‘the social graph’.

The launch is good news for users - Facebook currently has the search clout of an anosmic sniffer dog - but bad news for its search rivals. Graph Search could bite a considerable chunk out of Google, Yelp and Foursquare. Indeed, Yelp’s share price dropped 7% on Tuesday immediately after the news, closing at $20.61.

Why? Well, once the update goes live, (the function will be soft-launched at first to just a few hundred thousand users), Facebookers may choose to use the social network to look up possible holiday destinations or decide which gigs are likely to be worth the ticket price. These are people that would previously have used networks like Yelp or Qype for similar information.

For all those concerned about the privacy implications of this update, hackles down. Zuckerberg has stressed that people will only be able to browse through the photographs, people, places and members' interests that have already been shared with them.

‘This is not web search,’ says Rebecca Lieb, an analyst with the Altimeter Group, echoing Mark Zuckerberg’s own statement. ‘This is not find me a recipe for banana cream pie or I need to buy a 24 inch TV screen, where should I go? This is what movie should I see, what restaurant should I eat in?’

So it’s not ‘web search’. We get it. But it is interesting that Facebook has opted to integrate Bing’s search engine into Graph Search. This means that if users can’t find the answers they are looking for on the social network, Bing then takes over to offer further suggestions. That’s definitely Google territory. ‘In the event you can't find what you're looking for, it's really nice to have this,’ says Zuckerberg, innocently.

However, while users may rejoice at the idea of a revamped Facebook search, the markets definitely ‘do not like’ this. Facebook shares, which climbed 15% since the start of 2013, slid 3% after the announcement to just above $30. Analysts were hoping to see the unveiling of a whizz-bangy Facebook smartphone or fully-fledged own brand search engine, not some internal update.

Nonetheless, MT thinks that this latest development is very interesting, phase one in a series of carefully plotted moves by Facebook to challenge the dominance of tech leviathans like Google. Zuckerberg has stated previously that he wants to make Facebook the market leader in social search, so he's being slightly disingenuous by side-stepping the issue now.

By distancing Facebook from 'web search', Zuckerberg is quietly pursuing his social search goal. Not by turning up at the gate, all guns blazing but by leveraging the quiet power of its billion-plus users and sneaking in through the back door…




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